Chinese Anger Grows As ‘get Rich Quick’ Investment Schemes Go Bust

BEIJING – When Cao downloaded the Qiangqiantong app, he never expected it could mess up his life certainly. Year The 61-year-old grandfather retired from his factory job last, and bills were turning up – rent for an apartment near his son, money for his family. 11,600 – his whole savings – with Qiangqiantong.

The app stated to offer amazing investment opportunities, with high results and little risk. Instead, june this, the company down shut. Now Cao will not know whether he’ll see his money again ever. He went to the police, however they say they cannot help. He has considered getting another job, though he concerns anyone shall hire him. He have not told his children or wife and didn’t give his name, so they would not find out. “I don’t know what to do,” he said.

Over days gone by decade, millions of traders have sunk their cash into thousands of companies like Qiangqiantong (which roughly translates to Get Rich Quick) while others with brands such as Money Pig and Qianbao, or Wallet. The promises were the same – regular growth, big dividends and the opportunity for investors to place financial worries behind.

Investors lapped it up. 200 billion using on P2P dreams. Some state-owned banking institutions even helped help obligations, and federal government officials spoke of some of the P2P companies in glowing terms. Since June But, a huge selection of upstart investment companies have eliminated bust – many dropping victim to credit runs, risky wagers or the same Ponzi-scheme unraveling that brought down fraudsters such as Bernie Madoff. The rise and fall of the investment mania in China also provide a window into the wild and dangerous part of China’s economic boom. The amount of money flows – developing a middle income in a era – but rules to protect traders and press out swindlers have lagged much behind.

“There is a human and interpersonal cost to the bad behavior” of lenders, said Jeffrey Towson, professor of investment at Peking University’s Guanghua School of Management. In the past few weeks, those defrauded in the failed investment plans have vented their anger at the government, with protests calling to get more accountability and bailouts.

It is unclear whether Chinese leaders will part of to help people recoup their money. Authorities did little to curb the free-for-all investment atmosphere as it grew. Online P2P sites began to spread across China about a decade ago. Initially, the companies wooed potential donors with flashy promotional initiatives on public media sites, in concert halls and even on apartment-building elevators.